Students see change in education funding
By
Brandy Chandler-brandychandler@gmail.com
When President Obama signed the health care reform legislation this week, it included a section authorizing a major overhaul in education funding, allotting more money for community colleges, and altering repayment stipulations for student loans.
Under the new law, banks will no longer be part of the government-backed student loan programs, and colleges and universities will have to switch to government direct lending by July 1.
According to the United States Department of Education, this legislation means that $40 billion more dollars will go toward the Pell grant program, with a $2 billion investment over four years for community colleges to develop, improve and provide education and career training programs.
Students will be able to choose to limit their student loan payments to 10 percent of their income, with any remaining balance forgiven after 20 years. And public service workers can have their loans forgiven after 10 years. According to the Congressional Budget Office, the move will save $68 billion for college affordability and deficit reduction over the next 11 years.
Southern State Community College President Dr. Kevin Boys said national attention for community colleges is a positive thing, and he feels that many of the changes the legislation brings will be positive for area students who are struggling to pay for college.
"Any time community colleges receive attention from the federal government, I would regard that as a good thing," Boys said.
"This has the potential to provide additional programming and support to the kind of things we are accomplishing in Ohio anyway. It's nice to have some federal funding regarding that."
The vast majority of Southern State students receive Pell grants, and Boys said the additional funding will be a benefit to local students.
"Moving the student loan programs to direct loan is going to save $61 billion, and they have earmarked $36 billion of that to go to Pell grants, as opposed to loans," Boys said. "Part of that makes up for a shortfall they are experiencing in Pell grants. Another aspect, not until 2013, there are some inflationary measures that will be placed in the Pell grant program so Pell grant maximums will increase with a typical rate of inflation. That will also be a help to students. In the long run, it's one of the key benefits to our local population."
Janeen Deatley, director of financial aide at Southern State, said that 87 percent of SSCC students receive Pell grants.
"It is the largest funding source," Deately said. "Students loans are running pretty close dollar wise, but maybe not in the number of students."
Deatley said an estimated 70 percent of SSCC students utilize student loans.
"Legislation like this is typically hundreds of pages long," Boys said. "The details are usually included in the rule-making process. As those become known we'll have a much more specific idea how this money can be utilized to help our college and our area students."
The new cap on loan repayments, Boys said, will probably be helpful to local families.
"I don't have any doubt it will help families that are in that circumstance. That is a good thing. Any students who would be qualifying for federal loans, of course, already have caps on the repayment schedule, but a 10-percent cap will help out some of our families."
The legislation has faced criticism from some colleges, as the initial legislation contained a great amount of funds going toward community colleges. "The original proposal called for $18 billion to be put in special alignment for community colleges and students who attend them," Boys said. "That figure is $2 billion in the final bill. Our country and our Legislature face huge challenges when it comes to priorities. I just would prefer to be grateful for the $2 billion investment in community colleges and hope it is a good start to retraining our work force and using community colleges to stimulate the economy."
Boys said that SSCC has a number of developing programs and initiatives that will aid in workforce development.
"We have just submitted to the board of regents a program in
entrepreneurship that will assist individuals who want to start their own company. The spirit of the program is 'Make a job, don't take a job.' The idea is to capitalize on the creativity and ingenuity of Americans and those here in southern Ohio.
"We are looking for approval and getting it implemented in the next year. We have also been very instrumental in the One stop programs in several counties.
"Part of the challenge is aligning the programs to meet the demands that are currently out there. Certainly the health profession is looking for nurses, therapists like respiratory therapists, and we¹re already exploring some additional areas of help for people who (may be interested in those areas of study)."
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